S&P hits seven-week high after Fed unveils stimulus plan

NEW YORK – The S&P 500 climbed to a seven-week high on Wednesday after the Federal Reserve announced a new stimulus plan, its latest attempt to boost the country's struggling economy.

The S&P 500 ticked up as high as 1,438.59, its highest intraday level since October 22, with all 10 industry sectors in positive territory. Financials led the advance, with the S&P financial sector index up 0.7 percent.

The new plan will replace a more modest program set to expire with a fresh round of Treasury purchases that will increase its balance sheet.

"The actions by the Fed were more aggressive than investors anticipated," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

"The asset-purchasing program is probably larger and more comprehensive than some might have thought."

The central bank committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September. It also said it will keep its near-zero interest-rate program in place until the U.S. unemployment rate falls to 6.5 percent from its current 7.7 percent.

The Dow Jones industrial average gained 22.95 points, or 0.17 percent, to 13,271.39. The Standard & Poor's 500 Index rose 4.40 points, or 0.41 percent, to 1,432.24. The Nasdaq Composite Index dipped just 0.25 of a point, or 0.01 percent, to 3,022.05.

Negotiations over plans to avoid the "fiscal cliff" intensified in Washington, but U.S. House of Representatives Speaker John Boehner said on Wednesday that "serious differences" remain with President Barack Obama in their talks. If no agreement is reached, steep tax hikes and budget cuts will fall into place early next year.

The S&P 500 was up for a sixth straight day, its longest winning streak since August, although gains have been less than 0.5 percent per day, on average, in part due to uncertainty over the cliff negotiations.

Shares of Aetna , the third-largest U.S. health insurer, jumped 4 percent to $46.26 a day after the company gave a higher forecast for profit and revenue growth in 2013.

But Wal-Mart Stores Inc fell 2.7 percent to $69 as the largest drag on the Dow following the Indian government's announcement of an inquiry into the company's lobbying practices.